PLANSPONSOR - February - March 2022 - 26

PARTICIPANTS SPECIAL ISSUE | PHASED RETIREMENT
When
Workers
Retire in
Stages
A phased retirement
program-formal or
informal-allows for
smooth transitions
I
t's a somewhat common scenario:
A highly valued long-term worker
announces he is retiring, and the
employer, caught off guard, has mixed
emotions. While concerned about the
transition-the in-depth knowledge
and 20 years' experience will be hard to
replace-the employer is glad the position
will open up, letting him advance
the man's talented, young subordinate
and increase the odds of retaining her.
To ease the difficulties caused by
immediate full retirements-and to make
exits more productive and less stressful for
all-people in the industry have started
talking about phased retirement.
Tyler Papaz, director of private
wealth with Cornerstone Advisors Asset
Management, in Bethlehem, Pennsylvania,
says one major advantage of phased
retirements is that employers can better
formalize a succession plan for key staff.
" The path [or phased] retirement allows
the employer to leverage the knowledge
base of a seasoned employee and be more
deliberate about imparting that knowledge
to the successor, " Papaz says.
External stakeholders also benefit
because the transition lets the employee's
clients and/or customers build a relationship
with the person assuming the
26 PLANSPONSOR.COM February - March 2022
job. The same holds true for those the
employee worked with in his internal
roles: co-workers involved with systems
and processes that must be maintained,
well after he retires, Papaz adds.
The federal government's phased
retirement program-a formal program,
vs. the informal type some companies
choose-highlights the emphasis on
knowledge transfer. " Phased retirement
[is] a new tool that allows managers to
better provide unique mentoring opportunities
for employees, while increasing
access to the decades of institutional
knowledge and experience that retirees
can [offer], " said then-U.S. Office
of Personnel Management Director
Katherine Archuleta, in 2014, when the
program was announced.
With the federal program, which is
for federal government employees, participants
are required to devote 20% of their
time to some form of knowledge transfer
activities.
A November 2019 report from
the Society for Human Resource
Management suggests that phased retirement
can address two distinct groups
of older employees. The first includes
employees who are still productive and
would be difficult to replace; a phased
program can help keep them working.
The second cohort, the SHRM report says,
are " already 'retired in place,' signaled by
a loss of interest in their work and a drop
in productivity. " These workers should
retire but do not, which can create a frustrating
uncertainty when it comes to their
eventual departure dates.
" A phased retirement program can
lead to higher engagement and improved
well-being for employees nearing retirement,
which ideally translates into higher
productivity, " notes Lauren Hoeck,
senior director, retirement, with WTW
in Arlington, Virginia. A phased program
can lead to more predictable retirement
patterns, she adds.
Many older employees appear interested
in working fewer hours. A survey of
Art by James Yang
60,000 workers in 15 countries, conducted
by the Aegon Center for Longevity and
Retirement, Transamerica Center for
Retirement Studies, and Instituto de
Longevidade Mongeral Aegon, found that
57% of the respondents said they expect to
have a phased transition into retirement
either because they want to stay active or
for financial reasons.
What Type of Program?
Companies looking to accommodate
employees' desire to work less can choose
either a formal or an informal phased
retirement program. The federal government's
program, being formal, includes
eligibility, participants' and managers'
duties, and timelines defined and agreed
upon in advance. Informal programs
are ad hoc: An older employee expresses
a desire to work fewer hours, and
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PLANSPONSOR - February - March 2022

Table of Contents for the Digital Edition of PLANSPONSOR - February - March 2022

INSIGHTS
INDUSTRY ANALYSIS
RULES & REGULATIONS
UPFRONT
Let’s Talk
Let It Grow
When Workers Retire in Stages
Virtual Lessons Learned
Managed Accounts, Today
How ‘Well’ Is ‘Well’ Enough?
Differentiation by Income
FIDUCIARY FORUM
INSIDE ANGLE
PLAN PROFILE
PLANSPONSOR - February - March 2022 - Cover1
PLANSPONSOR - February - March 2022 - Cover2
PLANSPONSOR - February - March 2022 - 1
PLANSPONSOR - February - March 2022 - INSIGHTS
PLANSPONSOR - February - March 2022 - 3
PLANSPONSOR - February - March 2022 - INDUSTRY ANALYSIS
PLANSPONSOR - February - March 2022 - 5
PLANSPONSOR - February - March 2022 - RULES & REGULATIONS
PLANSPONSOR - February - March 2022 - 7
PLANSPONSOR - February - March 2022 - 8
PLANSPONSOR - February - March 2022 - 9
PLANSPONSOR - February - March 2022 - UPFRONT
PLANSPONSOR - February - March 2022 - 11
PLANSPONSOR - February - March 2022 - 12
PLANSPONSOR - February - March 2022 - 13
PLANSPONSOR - February - March 2022 - 14
PLANSPONSOR - February - March 2022 - 15
PLANSPONSOR - February - March 2022 - 16
PLANSPONSOR - February - March 2022 - 17
PLANSPONSOR - February - March 2022 - Let’s Talk
PLANSPONSOR - February - March 2022 - 19
PLANSPONSOR - February - March 2022 - 20
PLANSPONSOR - February - March 2022 - 21
PLANSPONSOR - February - March 2022 - Let It Grow
PLANSPONSOR - February - March 2022 - 23
PLANSPONSOR - February - March 2022 - 24
PLANSPONSOR - February - March 2022 - 25
PLANSPONSOR - February - March 2022 - When Workers Retire in Stages
PLANSPONSOR - February - March 2022 - 27
PLANSPONSOR - February - March 2022 - 28
PLANSPONSOR - February - March 2022 - 29
PLANSPONSOR - February - March 2022 - Virtual Lessons Learned
PLANSPONSOR - February - March 2022 - 31
PLANSPONSOR - February - March 2022 - Managed Accounts, Today
PLANSPONSOR - February - March 2022 - 33
PLANSPONSOR - February - March 2022 - How ‘Well’ Is ‘Well’ Enough?
PLANSPONSOR - February - March 2022 - 35
PLANSPONSOR - February - March 2022 - Differentiation by Income
PLANSPONSOR - February - March 2022 - 37
PLANSPONSOR - February - March 2022 - FIDUCIARY FORUM
PLANSPONSOR - February - March 2022 - INSIDE ANGLE
PLANSPONSOR - February - March 2022 - PLAN PROFILE
PLANSPONSOR - February - March 2022 - Cover3
PLANSPONSOR - February - March 2022 - Cover4
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